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CS Professional · Arbitration, Mediation and Conciliation · Arbitration: Introduction, Agreements and its Institutions

Meera Pharma Ltd and Orion Labs Ltd agreed to arbitration 'in accordance with the rules of the Mumbai Centre for Dispute Resolution'. The rules prescribe a time limit for filing the written defence. Orion says those rules are not binding as they are not in the Act. How does Section 2 treat the rules?

The rules form part of the parties' agreement. Section 2(8) states that where Part I refers to an agreement of the parties, that agreement includes any arbitration rules referred to in it. Orion's objection fails, since rules adopted by reference are binding without any separate incorporation by a Court.

  1. AThe rules bind only if the Court incorporates them
  2. BThe rules are irrelevant to any reference to party agreement in the Act
  3. CThe rules bind only on matters the Act does not mention
  4. DWhere the Part refers to an agreement of the parties, that agreement includes any arbitration rules referred to in itCorrect

Explanation

Section 2(8) provides that references in the Part to the parties' agreement include any arbitration rules referred to in that agreement. So the institutional rules form part of the agreement. The Act does not limit this to silent matters or require Court incorporation.

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